GBP/USD consolidates recent gains with all eyes on the bi-weekly Brexit talks

• GBP/USD seesaws around 1.5-month high amid a lack of fresh catalysts.
• The UK lawmakers prepare to oust PM Johnson when the Parliament resumes.
• The EU/UK diplomats will hold bi-weekly Brexit negotiations, Irish backstop keeps haunting the departure negotiations.

Although the Parliament prorogation and a law canceling no-deal Brexit portray near-term relief for the GBP/USD pair buyers, political plays surrounding the departure and the Prime Minister’s (PM) future keep the quote under pressure while flashing 1.2350 on the chart ahead of the London open on Wednesday.

The United Kingdom’s (UK) PM Boris Johnson is under immense pressure, not only from the domestic politics but also from the EU, after he lost all proposals supporting his pledge to leave the EU on October 31 without any ifs and buts. As a result, recent news from the Sun says the PM Johnson is likely taking the compromised Brexit deal to give another push for his dream exit date.

However, the UK Express revealed the report that shows Jacob Rees-Mogg’s, leader of the House of Commons, Tory wing likely withdrawing support from Mr. Johnson if he goes ahead with the all Ireland backstop proposal that was previously considered for Brexit. Also, talks were on the rounds that the PM will again try to gain support for an early September as soon as the parliament resume during mid-October. With this, today’s EU/UK Brexit talks between the British PM and Brussels’ Brexit task force will be keenly observed.

On the other hand, the US Dollar (USD) awaits key consumer-centric data, the European Central Bank (ECB) meeting for fresh impulse while mostly being away from bears due to the optimism surrounding the US-China trade talks. August month Producer Price Index (PPI) may offer intermediate trade momentum to the pair. Forecasts favor headlines PPI to remain unchanged at 1.7% (YoY) and soften a bit to 0.0% from 0.2% on MoM whereas PPI ex-Food & Energy is likely increasing to 2.2% from 2.1% on a yearly format.

Technical Analysis

While buyers are looking for the successful break of mid-July low, near 1.2385, to target 100-day exponential moving average (EMA) level of 1.2475, sellers await sustained trading below August 27 high of 1.2310 to aim for 1.2210/05 horizontal support-zone.